Collective Commentary about the New Package Travel Directive

160 COLLECTIVE COMMENTARY ABOUT THE NEW PACKAGE TRAVEL DIRECTIVE There is currently no EU legal obligation on EU airlines to hold a security guarantee for seat-only consumer protection against the airline’s insolvency. Feedback during the Commission’s consultation process on reforming the 1990 Directive supported the idea of introducing one. “A large number of stakeholders find that the fact that organisers/retailers, but not airlines, have to provide the consumer with a financial security against insolvency creates market distortion. Many stakeholders from all stakeholder groups argue that airlines just as much as all service providers should set guarantees. According to these responses, airlines carry similar risks to organisers/ retailers when it comes to the length of time between the reception of payments and the execution of services.” 18 . While there is currently no insolvency security obligation on airlines, there is already an EU regulation which tries to lessen the risk of airline insolvency through the obligation on airlines to hold a business licence. Regulation 1008/2008 19 requires EU airlines to hold a licence designed to promote financial stability. This is not a safety or technical licence. It’s a business-stability licence which seeks to ensure airline stability through monitoring of airline business plans and major corporate decisions which affect the airline’s financial stability by a regulator. In the context of demands that the obligation to have insolvency protection be extended to airlines, the EU Commission has drawn attention to the fact that Regulation 1008/2008 requires MS “to take action should they not be satisfied with the capital adequacy of an air carrier they licence. However, the current EU legal framework does not establish any direct insolvency protection requirement for flight-only tickets holders …” 20 . The airline business licence was introduced in the aftermath of airline deregulation in 1992 as a means to prevent the insolvency of newly established airlines. Licensing has not eliminated the risk of airline insolvency. In a study for the EUCommission 21 it was revealed there were 96 EU registered-airline-insolvencies 18 EU Commission [2007b], p 7. See also EU Commission [2010], p 6. 19 Regulation of the European Parliament and the Council on common rules for the operation of air services in the Community OJ L 293/3, 31.10.2008. 20 EU Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Council of the Regions, Passenger Protection in the event of airline insolvency, COM[2013b] 129 final, p 3. 21 Steer, Davies, Gleave, [2011], Impact Assessment of passenger protection in the event of airline insolvency, Final report for the European Commission.